I was talking to a
landlord from Burton Lazars the other day about what is happening to the level
of rents that are being achieved in the Melton Mowbray property market.
In terms of rents in Melton Mowbray, it appears that rents being achieved for new rentals (i.e.
when the tenant moves out and new tenant moves in) have risen in the order of 3%
in the last 12 months on top of the
range modern properties, yet remained static for older Victorian terraced
houses and converted apartments. However,
landlords with existing sitting tenants, irrespective of age are not increasing
their rents, as most landlords prefer to keep their existing tenant paying the
same rent and have the peace of mind that their tenant remains, (thus reducing
the risk of a void period).
It must be remembered
rents dropped by 7.7% over 2008/9, due
to oversupply in the rental market in 2009.) A lot of the people who couldn’t
sell their property in Melton Mowbray in 2008/9 when the Credit Crunch hit in
2008, decided to let their house out to avoid selling at a loss. In fact, the number of houses on the market
in Melton Mowbray dropped by 60.9% between
April 2008 and February 2010, a lot of which came on to the rental market in Melton
Mowbray. However, looking at the longer
term, tenants have had it good because since the turn of the Millennium, average
wages have grown by 46%. Rents outside London have only grown by 36% over
this period.
I told the landlord
that there is a lack of new rental properties in Melton Mowbray coming on the
market. In fact according to the Office of National
Statistics, there are only 180 new rental properties coming to the market each year
in Melton Mowbray but the population of Melton Mowbray is rising by 240 people
per year – something will have to give soon! This is compounded by the fact a number of
landlords are looking to sell their rental properties in the coming months, as
the property market in Melton Mowbray has improved. This is
further compounded as tenants in existing rental properties appear to be
staying in properties for longer periods of time.
Looking at the rents charged in Melton Mowbray, historic
evidence in the UK suggests private market rents have moved in line with
general inflation. Government figures
only go back as far as the year 2000, but looking at other countries with
similar housing markets (America, Australia, Ireland and Holland) the fact is
rents paid by tenants tend to rise in line or just ahead of inflation.
As short term wage growth in Melton Mowbray has eased off
recently, rising by only 1.3% in the last 12 months, taking average salaries in
Melton Mowbray to £24,921pa. With the tax breaks announced by The
Chancellor in the Budget, I believe, even though rents have kept pace with
inflation in the past, renting as an option has become more affordable, and is
increasingly seen as a lifestyle choice. With returning economic growth and expected
increases in the rate of growth of wages, above inflation rental growth could
rise.
If you want a chat about the local Melton Mowbray property
market, pop in for a coffee or email me on charlotte.baker@belvoirlettings.com
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